The Republican journal. [volume] (Belfast, Me.) 1829-current, 1887-06-09
The Railroad Decision.
Clerk of Courts Wadlin received Monday the
rescript and the certificate of opinion in the rail
road case, as follows:
STATE OF MAINE, !
5. J. COURT, PENOBSCOT, IS.
April TERM 1887

rescript and the certificate of opinion in the rail
road case, as follows:
STATE OF MAINE,
5. J. COURT, PENOBSCOT, IS.
APRIL TERM, 1851
Charles II. Hazeltinc ct ais, vs.. Belfast and
MOOschcad Lake Il. Il. Co. ct ais. In the above
named action, which is pending upon the docket
of the Supreme Judicial Court for the County of
Waldo as Il case marked claw a majority of the
Justices of said Supreme Judicial Court, after
mature advisemcnt upon the arguments of counsel
in said case, having determined the same: 1t is
now ordered, that the clerk for said Waldo county
make under said action the following entry, name
ly-"Bill sustained with costs. \ decree to be en-
tered requiring the declaration and payment of,
within II reasonable time not exceeding thirty
days, dividend of six per cent. on the preferred
stock, as its share of the earnings of the road
during the year 1885. The amount of such diyi-
dcnd to he the sum of $l6,0G2."
CIAs. T. SWEET, Clerk.
Holders of preferred stock in the Belfast and
MOoschcad Lake railroad company are entitled to
dividend from net profits each year during
which they are earned, but not under the terms
of their subscription, to cumulative dividends;
the arrearages of one year are not payable out of
the earnings of subsequent years. The inquiry
must therefore be whether dividends have been
earned during the particular year at the eNpira
ton of which they arc demanded
Whilst the prospective wants and liabilities of
railroad corporation may to some extent be taken
into account in asccrtaining whether q dividend
should be declared, directors are not justified in
refusing to declare dividend from earnings on
hand, to preferred shareholders, merely because
the corporation cannot pay its funded mortgage
debt In full at maturity If dividends be madc
| other conditions are to be considered.
The court will compel company to declare and
pay dividends on preferred stock, when the qucs
ton becomes one more of right to be determined by
the law than of discretion to be determined by d-
rectors, and the directors neglect to perform le
gal duty. The contract under which preferred
stock Is subscribed for Imposes an obligation on
the company which the law requires to be kept.
The following facts appear: The road cost ST.
100000; the company owes nothing but a bonded
mortgage debt of $l5O,OOO, to mature in $780, the
common stock Is $780, 40C and the preferred $780,
100 paid in, the extra cost of the road S25l 900,
has heen paid from the earnings of the company
between the years 1871 and 1885, when above all
liabilities and expenses which were to be provided
for In the latter year, there remained then in the
treasury S22 4l2.32; the road is under lease at an
assured rent of $4,000 per annum until 1921, the
Jesse running the road at its own risk and eX-
pensc, keeping it in repair and paying all taxes
| thereon during the term the company has but
| triiling expenses of its own; can renew any part
| or the whole of its debt upon advantageous terms
and the preferred shareholders have been for
most of the time deprived of dividends in order
| to enable the company to consummate the pay
ment of the before named amount of debt.
| Held; That on chose facts a dividend of six per
cent should be given to the preferred. stock for its
| earnings for lSs:,.